Microsoft's AdCenter Opens for Business

Microsoft now lets anyone sign up for AdCenter, the long-awaited, self-serve Internet advertising feature that competes with Google's pioneering AdWords.

To create an AdCenter account, you must leave a credit card number. Microsoft then charges that credit card account a nonrefundable $5. From there, AdCenter is very similar to Google's AdWords.

Each lets companies bid against others in order to have their advertisements accompany search results for a particular search term. Each time someone clicks on the ad, Google, Microsoft or another such company gets paid the amount of the winning bid.

But Microsoft thinks it has a big edge. The company claims that no other search advertising program steers ads to customers based on day of the week, time of day and a specific geographic location.

AdWords and Yahoo's self-serve ad feature can't target an audience that precisely. In theory, the more refined the audience choice, the more successful the marketing.

AdCenter makes Microsoft a "solid No. 3 player," Directions On Microsoft analyst Matt Rosoff said during an interview in late December, when AdCenter first appeared on the scene in Singapore and France.

That could mean more of the spending on search advertising will go Microsoft's way. And that could mean significant new revenues. In the United States alone, $5.1 billion was spent on this kind of advertising in 2005, various analysts suggest.

AdCenter also represents the latest in hostilities between Google and Microsoft, which Google identifies as its chief competitor, according to Google financial filings.

Microsoft feels the same way about Google. The Redmond, Wash., software giant, and operator of the No. 3 search engine, intends to spend $2 billion more than expected, mostly on MSN, its Internet portal and search engine, and Windows Live, a next-generation version of many of its existing features like Hotmail e-mail. Both features compete directly with Google.

"We will keep them [Google] honest," Microsoft Chairman Bill Gates said during a May 3 address to the annual MSN Strategic Account Alliance in Redmond. AdCenter is also one of a number of new, Internet-based features that Microsoft is expected to unveil Thursday, May 4, the summit's final day.

The general release of AdCenter is a kind of curtain call for Yahoo, which has been providing the same kind of features to Microsoft under terms guided by a profit-sharing arrangement. That agreement ends in June, and at that time it's many an analyst's understanding that Yahoo will disappear from the scene.

(NOTE: The article originally refered to the wrong Google advertising platform.)